Transitioning employees after a practice purchase

Paul Edwards offers five effective post-purchase policies

Whenever I hear that a dental professional is thinking about buying a practice or has just gone through with a purchase, the first question that springs to my mind is, Do you have a plan for transitioning the employees? Practice transitions are fascinating because they touch upon nearly every HR issue possible — from your underlying policies and onboarding employees, to managing complex ongoing HR issues, to (in many cases) letting one or more employees go by the time the transition is complete.

After watching the post-purchase HR scenario play out time and time again and providing guidance and problem-solving for scores of dentists during the rough patches, I’d like to share the treasure trove of recommendations I’ve stockpiled. Some are directly aimed at lowering your risks as an employer, and others will smooth out your management transition with your new team (which, by the way, also lowers your risks). This guidance applies whether you’ve just bought your first practice or have purchased a second or third. I’m also assuming that you’re trying to keep at least some of the practice’s existing staff, although I’m by no means suggesting that you keep them all.

Practice transitions are fascinating because they touch upon nearly every HR issue possible —
from your underlying policies and onboarding employees, to managing complex ongoing HR issues, to (in many cases) letting one or more employees go by the time the transition is complete.

First, though, I want to point out that transitions in practice ownership are scary for employees; and fear, intimidation, and insecurity are not the way to begin, maintain, or grow your management relationship — especially when what you want in return is loyalty, positivity, and commitment to your goals. Employees are your lifeline to your patients.

Keep that in mind throughout your transition, along with these tips.

1.    Start with honesty.
It’s critical to be honest with all employees involved in the transition because you need their honesty and good faith efforts in return. During this time of uncertainty, you’ll establish control more easily if you don’t exacerbate their negative feelings. Employees will be worried — and rightly so — about whether they can expect to keep their jobs, whether their pay or benefits will change, and whether there are going to be unpleasant upheavals. They want to know what to expect from you, and what you expect from them.

Address all of those issues. If some things have not been decided yet, such as whether PTO or benefits will be changing, let the employees know when they can expect a decision.

Meet with each employee as soon as you can (if possible, before the deal is even done) to discuss the transition. Ask them what they do, if they are happy, and how they see the practice evolving. This is an opportunity to show you are a worthy leader, capable of compassion, and rewarding of those who commit to the practice’s success.

A good approach is: “I want to be very clear about my expectations for each employee and will be evaluating each individual. I want employees who support our patients and my vision for our success. But it is not my intention to keep anyone in a position you don’t want to be in. I encourage you to talk to me, and tell me your concerns, and you can expect the same from me.”

Even if you are the World’s Best Boss and have the coffee cup to prove it, you will probably encounter resistance to your changes because human nature is great at resisting change. Sometimes we even resist positive change, just because it’s different! So while you want to show understanding, this is also the time to let employees know that you won’t be managing from a place of fear.

2.    Know what you don’t know, and get help.
You might be hoping not to upset the apple cart too far during your transition, especially if you’re buying a practice that’s apparently been running smoothly for years. But you’ll still want to put your own employee policies in place, not retain the potentially mine-filled preexisting employee manual. To do this, you’ll need expert help because chances are you didn’t spend dental school studying employment law or getting an advanced HR degree in your spare time.

But why can’t you keep those preexisting policies, since they seemed to work fine? It’s just not safe, no matter how fervently the selling doctor may believe in them. Countless ever-shifting laws govern employers’ every action, and you’ll have no idea which policies have been recently updated and which ones are risky or outright dangerous now. Most employee handbooks are full of policy errors, missing protections, and illegal or unenforceable “red flag” areas that invite legal claims. Often, everything looks fine on the surface. You won’t find out there’s a problem until the day you get a very unpleasant letter … from an employee’s attorney.

Instead, you want a policy manual that is professionally written and up-to-date, and you need expert guidance you can trust to safely resolve or minimize the risks in any issues you encounter. Have your new employee handbook ready early in the game! The most common mistake I see in practice transitions is not getting reliable expert support on employment issues.

3.    There’s a new sheriff in town.
Establishing a comprehensive set of policies isn’t enough — your real goal is to establish yourself as the “new sheriff in town,” and make sure the team has read and understood the law of the land. Meet with them, distribute your employee handbook, and allocate some time on the clock for them to read it thoroughly. Let everyone know that you need his/her signed acknowledgment by the next day.

Note that employees are signing an acknowledgement. They do not need to agree with each policy, but they do need to understand that you will hold them accountable if they choose to break the rules you’ve laid down. If your handbook is good enough, your employees are also acknowledging their responsibility to let you know when they experience a problem while working at your practice.
Make sure the expectations you set are clear and aboveboard. This is the first day of the rest of your employment relationship.

4.    Make affirmative decisions to hire or fire.
Don’t passively inherit the entire team of the practice you’re purchasing — this is your chance to eliminate any obvious “bad apple” employees before they spoil the whole barrel (your new team and practice). Instead, make affirmative decisions to hire or fire. Keep in mind that you still need to be careful your actions won’t seem discriminatory.

For the employees you’re hiring, let them know they are in their 90-day “getting-acquainted period,” during which you can both decide if the new employment situation is a good fit.

5.    Fixing small problems early prevents huge problems later.
Once your purchase goes through, the obligations of being an employer immediately fall upon you. Hopefully, you already developed some pre-sale impressions of the biggest challenges ahead. But post-sale, it’s up to you to identify, evaluate, and solve small transition problems rapidly so they don’t grow into big employer nightmares.

Check each employee’s files. Do they contain old paperwork or write-ups, or are they empty? If they are, just remember an empty file does not mean there’s never been a problem. It just means you’ve got no documentation from the previous owner about what type of employee this person has been up to now.

Make everything official with all-new hiring paperwork, and don’t put this off. Use a hiring checklist to ensure you hit everything that is required (e.g., new I-9s, W4s, other state and federal requirements, non-contractual offer letters, job descriptions, and background or reference checks, to name only a few). Email me if you’d like a free hiring checklist that’s attorney-reviewed.

As you move forward, and issues arise with your new staff — and they probably will, as you get used to each other — be pro-active and diligent about letting employees know what changes you need to see. Document your requests, any corrective actions, and what did or did not occur, especially if you took over an empty file cabinet! If you have an employee or two whose pushback is excessive, or who is simply not adjusting in the way you need, evaluate your risk factors and then let them go as soon as you can safely do so.

Every transition situation is unique, and I could fill books with the sum total of what you should do before, during, and afterward to streamline your experience and improve your experience with your new team. You’ll definitely want to consult with your favorite attorney or HR expert before you make final decisions about policies, grandfathered benefits, terminations, and situations unique to your sale. But if you begin with these five tips, you’ll have made a very good start.